How Will Recent Tax Law Changes Affect Your 2018 Return?

13
Sep, 2018

How Will Recent Tax Law Changes Affect Your 2018 Return?

Now is a good time to start preparing for the 2019 tax season so you won't be surprised with tax bills when the new year rolls around.  This year, it's even more important to review your situation with the new tax-law changes.  One thing you can do to ensure that your taxes will be in order is to schedule a consultation with Emerald Financial Partners now.  We offer Top Rated Local® tax services for individuals and businesses in Maryland.  Whether you’re interested in personal tax preparation or small business accounting and tax services, we can help!

Are You Withholding the Too Much or Too Little?

Earlier this year, IRS officials updated their withholding tables and issued a new Form W-4 for 2018 after passage of the Tax Cuts and Jobs Act last December. The act reduced employees' income tax rates, adjusted tax brackets and eliminated personal exemptions, among other changes.  The Treasury Department, which includes the IRS, "may make more significant changes to withholding in 2019 given its new discretion over the withholding structure provided in the Tax Cuts and Jobs Act," the GAO noted in a July report.

"It's important every year for people to review if they're having the right amount of tax withheld from their paychecks," acting IRS Commissioner David Kautter said in April. "This year, it's even more urgent for people to review their situation following the new tax-law changes."

"Many taxpayers have preferences about the tax refund that they will receive or the balance they will have to pay when they file their tax returns," the GAO report stated. "The tax withholding tables that Treasury and IRS update each year are an important tool that both employers and employees rely upon to form their expectations."

Will Your Income Change During the 4th Quarter?

Are you expecting a large year end bonus?  Are you changing jobs?  Any dramatic changes in income during the 4th quarter can impact your tax liability.  Schedule a consultation with the experts at Emerald Financial Partners today, so that you can prepare for your tax liability in April 2019.  It's better to be prepared than to be caught off guard!

Unreimbursed Employee Expenses

One of the biggest changes under the new tax law changes was the elimination of the deduction for unreimbursed employee business expenses, beginning with 2018 tax returns. This means that employees will no longer be able to offset their taxable income by common business expenses they may incur.  This can have a dramatic impact on your taxable income.  You may want to change your spending, talk with your employer, or plan for a larger taxable income.  The experts at Emerald Financial Partners can provide sound advice for your unique situation.

Don't Wait!

Don't wait until the New Year to evaluate your 2019 tax situation.  Schedule a consultation with the experts at Emerald Financial Partners.  

Emerald Financial Partners believes you should have a trusted partner, on call, to support you through the financial decisions that impact your life, your family, and your business. We provide a holistic approach to your tax, accounting, and financial needs.  Our team goes above and beyond to understand your unique needs and create strategies that will help you reach your goals.   Our services are structured to provide you unlimited access and on-call support to help you make better financial decisions, every day.

1
Sep, 2018

Qualitax Becomes Emerald Financial Partners

For Immediate Release

It’s an exciting time here at Qualitax and I wanted you to be among the first to know!  Over the next few weeks and months, you’ll notice that Qualitax will now become Emerald Financial Partners.

For the past 38 years, you’ve come to expect the best tax and accounting service in the area.  That’s not changing at all.  In fact, what we heard from many of our customers is that you want more than just a tax advisor.  So, our new brand reflects our ability to offer a more holistic approach to all of your tax, accounting, and financial needs.  Our new mission is also a reflection of those goals:

Emerald Financial Partners believes you should have a trusted partner, on call, to support you through the financial decisions that impact your life, your family, and your business. Our team goes above and beyond to understand your unique needs and create strategies that will help you reach your goals.   Our services are structured to provide you unlimited access and on-call support to help you make better financial decisions, every day.

This rebranding initiative reflects countless hours of thoughtful discussion about how we can provide a wider array of meaningful services to you, our valued clients.   For our business clients, we are expanding our Accounting & Remote CFO services.  Be sure to download a copy of our Business Services Matrix from our website to see the full suite of business services we now offer.   For our expanding base of Millennial clientele, I encourage you to check out our new Personal Success Package.  It’s a smart way to make better financial decisions, every day.

Our location and telephone will remain the same, so you will still reach us as you always have.  We will be getting new email addresses, but the old email will still work too!  Our old website will remain for the next year or so, but I encourage you to visit our new website at:  www.EmeraldFinancialPartners.com

We’re incredibly proud of the work that we do and thankful for the employees, clients, and partnerships that have accompanied us in our growth.   As always, please don’t hesitate to reach out if you have questions.

7
Aug, 2018

Good News for S-Corps

Tax reform gives you a new 20% Section 199A deduction on pass-through income.  But be aware the IRS requires that you pay yourself "reasonable compensation." If you don't, you can torpedo your deductions and be forced to pay extra taxes and penalties.  Here are 3 tips:

Reasonable Compensation.

Paying yourself "reasonable compensation" is so important. Reasonable compensation is generally considered to be what you'd pay for a third party to perform the services that you provide. If you fail to pay yourself reasonable compensation, the IRS can “recharacterize” your S corporation as wages. This makes you and your corporation liable for all payroll taxes.

Section 199A

Your salary affects your Section 199A deduction. Your W-2 reasonable compensation factors into your Section 199A deduction in two ways. It's important that you fully understand these factors.  To qualify for the full 20% deduction on your qualified business income under new tax code Section 199A, you need defined taxable income equal to or less than $157,500 (single) or $315,000 (married).  If your taxable income is greater than $207,500 (single) or $415,000 (married), you don’t qualifor the Section 199A deduction unless you have wages or property.

Salary Adjustments

Reducing or increasing your salary can be dangerous. Both strategies come with significant risks. What you should want to pay yourself is a Goldilocks salary. Not too much. Not too little.  Creating the 'reasonable salary' gives you two benefits:

  • A savings on your self-employment taxes
  • A Section 199A deduction

Summary

The new 20% deduction on qualified business income gives high earners who

  • are not in the out-of-favor specified service trades or business groups (doctors, lawyers, accountants, athetes, etc.),
  • pay little or no wages, and
  • own little or no depreciable property

an additional reason to switch to an S-Corp as their operating entity.

To find out how this would work for your unique situation, contact us for a Business Entity Analysis.  We'll work up all the numbers and give you the best options for you!

6
Aug, 2018

3 Reasons Your Business Needs a Strong Financial Partner

Whether you are a new business start-up or a business with years of history, the most important aspect of your business is the financials. Many business owners burn out because they try to wear too many hats or just don’t have the time or expertise to properly manage their finances. In this article, we’ll discuss the value of having a strong financial partner to handle the small business accounting, tax, and financial needs of your business.

Rule #1: Engage a Financial Partner Early in Your Business

When you start your business, a strong financial partner, like Emerald Financial Partners, can help ensure that you don’t make common mistakes. Setting up your Quickbooks properly, reconciling bank statements, tracking expenses, and creating a balance sheet are critical elements. If you decide to get a loan, you’ll need to have all of these items in order, and the better organized you are, the higher the likelihood that you’ll get your loan!

Rule #2: Outsource Accounting

As your business grows, you may need additional small business accounting services to manage the financial aspects of your company. Rather than investing in a full-time employee, outsourcing your accounting functions can often provide you with a higher quality of services, redundancy, and access to additional services, as you need them.

Rule #3: Remote CFO

Once your business achieves a certain level of success, you will need the financial expertise that will foster growth and help you strategically plan for the future. The remote CFO platform of small business accounting services that we offer at Emerald Financial Partners is a perfect choice. Our team works with you to oversee:

  • Accounting
  • Payroll and bookkeeping
  • Business financial strategies
  • Track and monitor expenses
  • Increase profitability
  • Streamline accounting systems
  • Provide you with accurate financial statements
  • Full-service accounting and compliance
  • DCAA compliance
  • Unlimited access to financial experts

To learn more about everything that Emerald Financial Partners has to offer you and your business give us a call to schedule a meeting today!

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